Bush's Pro-growth economy
 

In his address last night our illustrius president made sweeping remarks about his administration's pro-growth economy... which has lost 2.5 million jobs. Maybe no one was listening to the numbers he quoted when they applauded (like a letter from a two year old) but he said his now job initiaitive has opened up 1000 new jobs... less than 1% of the 120,000 promised. While it is true that his tax cuts have begun refueling the economy.. allowing we citizens to drive it forward (in an SUV), many lower income citizens are still suffering and haven't really been helped at all by his reforms. Perhaps its just me, but I don't think Bush's economic strategy deserves such high prasie.

Re: Bush's Pro-growth economy
 

Jobs are only one small piece of the economic puzzle. Productivity has been growing substantially over the last decade. Increases in productivity mean fewer people required to do the same job/meet the same production demands than in previous years. Low interest rates, low inflation, strong GDP growth, high home values, strong consumer confidence, strong consumer spending, and a healthy stock market are obviously signs of a very healthy economy.

Yes, there's nothing wrong with the American economy because American employers don't have to hire Americans. Think about the Savings!

http://money.cnn.com/2003/12/30/pf/o...ejob/index.htm


But don't worry America. I hear McDonalds will put you through Burger University!

Productivity is going up. The reasons are americans aren't using their vacation and sick time as they did in previous years. It's probrably because they are afraid of getting shit-canned in this economy if they do take time off.

Re: Re: Bush's Pro-growth economy
 

Unless you are poor and unemployed, then you take it in the pants even harder by comparison.

There will always be some people somewhere who don't have a job.

There will always be some people somewhere who blame the President for their inability to find work.

So it goes.

Moving along then...

And by extension, there will always be some people somewhere who have a job. There will always be some people somewhere who credit the President for their ability to find work.

So it goes.

Moving along then...

It is folly to presume that Presidential policy is the only variable in the labor markets.

It is, in fact, quite a foolish notion.

The current employment situation is largely the result of broad-based productivity gains (which benefit all of us - including the unemployed), and the recession that began in the fall of 2000.

Fiscal and monetary stimulus (i.e. tax cuts and Fed Funds rate cuts) have helped the economy emerge from recession, and job growth has indeed picked up (an increase of 278,000 in payrolls in the past five months, and a decrease in unemployment from 6.3% to 5.7% since June), but I wouldn't give the President (or the Congress) much credit for that either.

Re: Re: Re: Bush's Pro-growth economy
 

Everyone benefits from lower or non-inflationary prices due to increased productivity.

January 2001

The civilian labor force, 142.0 million, grew by 466,000 and the labor force participation rate rose to 67.3 percent.

December 2003

The civilian labor force fell by 309,000 in December to 146.9 million; the labor force participation rate decreased over the month to 66.0 percent.

That's a wierd way to lose jobs.

The unemployment rate, of course, is a different matter, but it's not bad by any stretch either.

If anyone might recall a few months ago when the democrats filibustered some judge nominations, the senate held a 30 hour debate. There was one classic moment in this debate which I think illustrates my point: A democrat from Nevada, John something, took the floor and asked why they were spending so much time debating a few people who made well over five hundred grand a year when there were many Americans in need of help, many of whom had lost their jobs under the Bush administration. He went on to present, by way of visual aid, what the president had done for these people in the last three years... A large blank piece of cardboard... oh and one more large blank piece of cardboard. There is a point somewhere here, and while in this situation he used it to criticize the republicans for making such a big deal over nominating some very uncompromising judges, it still remains that perhaps some thought should be given to the people losing jobs. Of course there are always people unemployed, and some who really don't want to be, but those that lose their jobs and can't find additional work should be helped. While the Bush administration has been pumping up the economy to get it back on track, assuming that eventually jobs would follow and everything would be fine, in the meantime three years without a job is a long time to wait.

The blank piece of cardboard is funny... I really have to use that some time in my life.

Re: Re: Re: Re: Bush's Pro-growth economy
 

I know. I'm currently benefitting from yet another year of tuition increases. The price of gas is up. Rent? Up.

My question is: At what point to productivity increases start to become a bad thing for the average american? Is it possible for the u.s. to become so productive that we only need half of the workforce? What does the other half do? I know it seems like a stretch, but at what point is employment more important than productivity?

speaking of tuition expensives... if bush wants to educate the workforce or low wages... max college tax deductible already

Re: Re: Re: Re: Re: Bush's Pro-growth economy
 

Yeah tuition is going to burn a lot next year, if I get excepted into the PUBLIC college of my choice it is going to run me 20K, up 30% from last year. That 20K isn't for a posh dorm either that is the three person no-space dorm.

private school, and i know that makes a difference, but I'm dropping 23,000 a year, WITHOUT room and board and books. thank god this is the last year. My friend (who's father happens to be a retired heart surgeon) said to me today that his parents had told him "You don't need the financial aide... leave it there for those who do." But even so, there's just not enough. My family is right on the edge, and I can tell you right now that school will put me in a mountain of debt i can only pray I will be able to find a job and pay off. I got federally funded financial aide for exactly 1 semester of my 8 semester stint in college. I've needed it the whole time. Debt consolidation, here i come... Wonder if GWB will give me tax credits for educating myself for a job that's being outsourced to India more often every day...

Well boys and girls, the armed forces is looking for a few good men and women. They pay tuition and give you a living stipend.

Or you could whine no one is handing you an education for free.

I'm still paying off my loans, now its your turn, one way or another.

I could join the armed forces, but i currently don't feel like suffering life changing chronic injuries from depleted uranium or dying in wars i don't believe in all while my veteran's benefits are being cut. That's just me. To each their own.

How much did you pay for college? What is the proportion of what you paid compared to what i would pay if i matched your degrees? How much has tuition increased over the inflation rate? Was your tuition less because your school got more tax-dollars than they do nowadays? Did you get better financial aid because there was more to be gotten?

I wasn't whining, i was pointing out that perhaps an overall increase in worker productivity means exactly shit to me as far as what i have to spend money on. In fact, maybe the more productive the american/indian worker is the less of a chance i'll be able to get a job in my field.
I plan on paying for my education, i'll probably be paying for it for a long time. That is, if my job isn't exported to india by the time i graduate. Honetsly, i think that exporting jobs will make good economic advice until they start hiring indian economists instead of american ones.

My education won't do me much good if I die in some Iraqi desert, and since people in a lot of countries get FREE college educations it isn't whining.

Aforementioned countires also pay 60-80% income taxes and education is alot mroe cheap.

Its closer to 35-50 and they get free health care, lots of benefits, more sick time, tons of social welfare, ect. I would much rather pay higher taxes and recieve these then pay lower taxes and not.

I, honestly, would fare quite badly in the military. I'm just not the right kind of person to do it. props for those who do. I'm not one of them. there's no shame in that. but filtherton has a good point here:
education costs have been skyrocketing with no way for us to make up the difference. And it's MUCH more expensive, even relatively, to attend college these days.

Do those spouting on about productivity gains adversely affecting job growth actually have some data to back up their conclusions? I don't doubt that we've had productivity gains in the last 2 years, I also know that we've had them in every single economic recovery since the New Deal - but somehow those recoveries also had a corresponding increase in job growth. It isn't an either/or proposition - except perhaps today in this recovery, which isn't really a recovery for labor, the correct definition would be a recovery of capital.

Post recession productivity growth happens all the time. They just don't typically happen to this extent or for this long. Since 1992 we are almost 30% more productive per hour of output.

Here's a chart I made showing productivity (non-farm output per hour) gains in the 8 quarters after each recession since 1947. Data sources are the Bureau of Economic Analysis and Bureau of Labor Statistics.

http://allenhost.com/albums/album14/aaq.jpg

Re: Re: Re: Re: Re: Bush's Pro-growth economy
 

Tuition increases are an entirely different matter. I don't know of a single person who didn't see tuition increases while in college in the US.

The second part is an interesting question and would take quite a bit of study to fully answer. A phd dissertation could easily be made of it.

A couple of reasons why productivity increases are unlikely to permanently decrease labor needs:

1.Productivity varies widely across industries, so it will be quite a while before productivity could be increased enough across the board to affect a permanent shift in employment.

2. New industries crop up constantly. How many people were employed in the computer industry 20 years ago? The internet 10 years ago? The car industry a 100 years ago? So long as new industries continue to crop up, it's unlikely that productivity gains can outstrip demand for labor over the long term.

This is getting absurd.

"waahhhhh, I want government to give me a free education"
"waaaahhh, I want government to get me a job"
"waaahhhh, I want government to give me healthcare"

Sheesh. Try standing on your own two feet. It's surprisingly liberating.

By the way, regarding unemployment, simply put, some people deserve to be fired.

And now for a much needed rant.

[Rant]
Those who expect to find gainful employment by looking to their elected officials to conjure up jobs for them are unemployed for a reason - they're morons. Any other half-wit who thinks that changes in the labor market are the direct product of Presidential policy hasn't got the mental capacity to bag groceries. I see help wanted signs in windows up and down Main Street. I see help wanted ads in newspapers all over the country. Of course, you have to be literate to know what they say or whom to ask for when you call, but that doesn't mean they're not out there. And if you can't convince that pimply-faced, lazy eyed night shift manager at McDonalds with his GED certificate taped to the wall above the fry-o-lator to hire you, then you're useless. You don't deserve to get paid because there's nothing you can do that's actually worth more than the effort required to supervise your sorry ass. The labor markets are a function of supply and demand, but that doesn't mean you can just demand a job and receive one. Nor does it mean there will ever be demand for idiots like you. What it does mean is that employers will hire and pay workers according to their need, and workers will receive salaries according to the value of their labor. The President is as much to blame for your utter uselessness as you are to blame for his success. Now run along and find someone else to blame before reality catches up to you. Better yet, go home and practice bagging.
[/Rant]

Thank you. I feel much better now. :D

And we're all very impressed by your cleverness. You do clever very well. Now see if you can do compassionate.

I don't think most people expect the government to give them a job. The fact of the matter is that there are enough resources and enough demand for labor in this country for every person to have a job, if those resources are managed correctly. What I hear people saying is that government policy is being misapplied such that it's creating a level of unemployment that is unnecessarily high. We're also talking about underemployment, where people are not able to find jobs that match their skills and abilities. True, they're still getting a paycheck, but they may be earning too much at McDonalds to qualify for some government assistance programs that could help them make ends meet till they find something more in line with their usefulness.

You're absolutely right, there is a population of people that is simply unemployable, for reasons of disability or mental illness or whatever.

However, just anecdotally, I live in an area where high-tech industry got hit very hard, and I know PhD's who looked for work for 6-12 months and were getting beat out for jobs at WalMart and McDonalds because they were overqualified and the managers knew they'd bolt as soon as they found a 'real' job. True, they could search nationwide for jobs, and that's fine if you're single or if your spouse can find a job where you're looking, but it's not great for the stability of families or communities to have to pick up and relocate every time there's a hiccup in the unemployment rate.

I just think your rant is a little off base with reality - there's this myth of the whiny unemployed. Most people I know who have been unemployed have tried their damnedest to get back to work. Most people don't want handouts, they want to support themselves and their families, and will do whatever they can to do that. Before you go spouting off again (and, might I add, sneaking right up to the line with your vitriolic little rant) you might try talking to some actually unemployed people about what they think is owed to them.

People go through hard times. Some of the best of us are, at times, smitten a hard blow. Believe it or not, I do have compassion for them.

Lurkette, you do a wonderful job providing us with examples of some of the hardships some Americans currently face.

The question is, will you simply blame the President for their hardship, or will you rise above this petty criticism and offer a solution?

What, in your opinion, should President Bush do?

I'm of the school that the President actually has relatively little power to influence the economy one way or another, at least in the short term. He can set the tone, and set the agenda, but without the complicity/support of Congress and the Fed, he's just a figurehead. I'm less concerned about what President Bush is doing to influence job creation right now than I am about the ginormous deficit he's running up - that's gonna hurt in a while, and if you think the economy is twitchy now, wait 15 years.

If there was anything to be done about the job market now, legislatively, I would say adopt stricter laws about exporting jobs overseas or allowing guest workers. And the problem is not entirely in the manufacturing sector - it's becoming more and more a problem of the mid-level white-collar sector as well. I would also extend unemployment benefits even further, and raise the income limits on temporary benefits like food stamps, travel vouchers, child care, etc. so people can work the shit jobs that are available and still support their families. In a lot of cases, it's simply not worth it to work because you lose benefits that you would otherwise be unable to afford.

Awesome post, lurkette. Very thoughtful

Incidentally, apechild, I'm not saying you're wrong that there are some people who think the government owes them a living. I just think that they're by far the minority. The frustration with the current administration seems to stem from the fact that they're paying a lot of lip service to helping the working class, while doing everything they can to hand out tax cuts to those who need them least, trying to gut government regulation of industry, and running up a deficit that's going to entirely preclude any government-funded safety net services in the future. Whether these measures will actually help the working class is, unfortunately, an empirical question being carried out in the laboratory of most people's everyday lives. Maybe they're right, I don't know. But I think we're dealing with the immanent death of the middle class as we've known it, and a lot of people are blaming the victim for not having enough initiative to overcome the growing hurdles to self-sufficiency that the government, from top to bottom, doesn't currently seem interested in knocking down.

While I agree with some of what you say, MORE unemployment benefits is not a good solution. I can't tell you how many fake interviews we had when we were looking for 2 new employees last fall so that people could show they were 'looking for work'. It got so bad we were worried about filling the positions and ended up over paying both of them (at least they were real).

The black family was destroyed by the good intentions of people. Its time we learn the lesson that paying people not to work is counter productive for everyone based on human nature.

Hold on. The tax cuts resulted in the middle and lower class paying an even lower proportion of taxes that they did previously. In other words, they received a disproportionately large tax cut, which helped them much more than it helped the rich.

Besides, since when has it been the job of the federal government to redistribute wealth? Do you want the IRS taking money from the most productive and handing it out to the least productive?

If we take away, or even reduce the incentive to work and succeed, what do you think will happen to the economy then?

Clinton's tax increase on the richest one percent in '93 notwithstanding?

Could not agree more, whats sad is that we're going to end up paying for it hard in the long run, or at least the younger generation will. Doesn't anybody realize this?
Utswo: I didn't quite follow your comment about the black family:

"The black family was destroyed by the good intentions of people. Its time we learn the lesson that paying people not to work is counter productive for everyone based on human nature."

could you explain it?

Oy. Might as well paint "liberal" on my forehead and run through an NRA meeting, but here goes...

When we're dealing with the scale of inequality that we're dealing with in this country, looking at proportions and "fairness" is a misleadingly simple way of looking at a complex system that tends to reward those at the top disproportionately more than those at the bottom.

No, I want the government to level the playing field and meet the basic needs of all of its citizens before allowing the fabulously wealthy who reached that level of wealth through inheritance, dishonest/unethical behavior *koff* Ken Lay *koff*, gaming the system (who do you think gets first crack at good-looking IPOs?), or just pure luck to prosper even more. I'm sure there are a lot of economic arguments I'm not privy to that would support this kind of inequality, but I know there are some that say such inequality is bad for the society as a whole, and just ethically it seems wrong.

We'll look more like Scandinavia? People would stop buying shit they don't need? What?


I don't know - I think the people who would have abused the system in the first place would abuse it anyhow, regardless of the increased benefit, and increasing/extending the benefits might actually help those who were genuinely trying to get back to work. It's not as though you could live for any extended period of time on unemployment benefits anyhow, but it might make the difference between solvency and bankruptcy for people who really just need a little more time to find a good job. I just don't think that increasing benefits is that much more incentive for abuse than what's currently in place.

How long do the benifits last now?

There comes a time you gotta tell someone to get off their ass and get a job. I've personally worked every kind of job from cleaning horse stalls to surgery, and I'm sick of people being lazy asses and expecting others to pay for it. There are plenty of jobs out there, and maybe they are not your #1 choise, but so what?

Well, "doctor" -The Federal Unemployment Benefits last about a year (with one federal extension).

If you bother to go down to the Unemployment office -you will notice that there are a number of people out of work whose families will go hungry if they "clean horse stalls" for a living.

Yes I knew it was a year, a whole year and you can't find a job? I'm sorry but thats bullshit. I'm not saying you need to do 'guest labor' work like cleaning horse stalls, I did it as a kid, but enough is enough. How long do YOU think it should last? 2 years? 10 years? Until a democrat is elected and then the economy magicly fixes itself?

A level playing field means equality of opportunity for all. Equal opportunities do not, however, guarantee equal results.

Look, I also want everyone to be rich and happy and successful and healthy and good looking, but the ends don't justify the means. Besides, where do we stop? When we discard all measures of objectivity and fairness (which you decry as "misleadingly simple" because the "system" is so complex) then you're left with arbitrary rules written by the whims of a fickle mob. It's already pretty bad when the richest 5% pay more than half of the nation's income taxes and the bottom 50% pay just 4% of the income taxes. We're already perilously close to a system in which the majority pay little or no income tax while receiving the lion's share of government entitlements - creating a sort of class-warfare where the nation's most productive citizens consistently find the products of their labor plundered and looted by an angry mob - where net payers of government revenues find themselves in a dwindling minority and the net consumers of government revenues wield the power.

And in the end, who should determine who needs what?

I'm not sure there should be a blanket limit to benefits that feed families. What's the alternative? You seem to think that there are plenty of jobs available to people that need them. You're wrong.

Like I said go and visit the local Unemployment office. Go there. I've been there. Sure there are idiots who aren't smart enough to bag groceries -but there are also people who have a solidly educated background.

For example -I've met someone who has an M.S. in Computer Science. He had a huge logbook of all the jobs that he applied to. He also had two kids, a morgage, and a wife to feed. He was scared to death of his benefits running out and he told me they were about to.

I'm not really sure what happened to him. Maybe at the last moment he got a job. I really hope that happened. -What you are suggesting, however, is that he is a "lazy" incompetent person. He didn't seem so.



Well, at least you admit it.

The following article appeared in last week's issue of Barron's. It bears great relevance to the topic at hand, so I thought I'd present it for further discussion. Keep in mind, the article is not political rhetoric, but economic analysis.

Here's another article

http://www.contracostatimes.com/mld/...ss/7642957.htm

Thanks Astrocloud.

The article you posted illustrates some real examples of one of the many factors in the economic equation being discussed here. Poignant anecdotes are always a nice way to add a little color to a discussion, but in a nation of 300 million, they don't always paint a complete picture.

If, in the interest of objectivity and fairness, you would like to offer a more complete perspective, please also post articles describing the increases in real income and standards of living that have come about as a result of falling input prices and rising productivity.

And before you go, allow me to redirect your attention to one excerpt from the above article by Epstein that I think you'll find particularly relevant:

"the vast majority of us don't supply these services -- we purchase them! So if a service job costing $100,000 per year (the American salary) now costs $10,000 (what the foreigner will accept), our real -- that is, inflation-adjusted -- income goes up by the difference. That's because, in this era of fierce competition, nearly all of it gets passed on to the consumer in terms of lower prices...

Let's say the displaced worker gets another job for $60,000. He's down $40,000, while all others have gained $90,000, for a net gain of $50,000.

This outcome is actually no different from a job displacement due to rising productivity. Imagine the worker lost a job in agriculture. At a salary of $100,000, say he produced a thousand bushels of wheat, which now cost only $10,000 to produce because of better technology. This worker is also freed up to contribute in some other way, which we'll value at his new salary of $60,000.

That is how incomes rise. And in this case, distribution of income has become more equal. "

Resign. And take Cheney with him.